Embattled Tribune (TRB) chief Denis FitzSimons continues to defend his leveraged-buyback plan.
Addressing the Newspaper Association of America's midyear review session Tuesday in Manhattan, FitzSimons claimed once again that dissident shareholders who oppose the plan are driven by personal gain, not the company's best interests.
FitzSimons grabbed Wall Street's attention May 30 by proposing a $2 billion plan to borrow money and buy back a quarter of Tribune's shares. He said the move would let the company focus on stronger properties in its newspaper-and-broadcast portfolio.
The Chandler family, holder of three board seats and 12% of the Chicago company's stock, said Tribune needs to put itself on the block after years of poor performance under FitzSimons' leadership. The Chandlers said they would accept a deal that would allow them to unwind the trusts that own their shares at a price they called favorable to the company.
But Tribune has pointed out that any deal could saddle the company with a big tax bill, and FitzSimons harped on that note again Tuesday. "The company has no intention of assuming any additional tax liability," FitzSimons said.
The Chandlers say that the premise of the 2000 Tribune/Times Mirror merger was to create so-called synergies between newspaper and broadcast assets, along with strong growth in interactive and other new-media opportunities. The trusts say management has failed to deliver on this strategy, so now the effort must be abandoned and Tribune either sold or broken up.
For his part, FitzSimons blames the tax consequences of the merger for pulling down his stock's performance. "As you are aware, Tribune absorbed a $1 billion tax bill in September that was inherited along with the Times Mirror acquisition," he said Tuesday. "This reduced our market capitalization and certainly damaged our stock's performance versus our peers."
FitzSimons says Tribune will continue to focus on leading local news operations and growing its interactive division. He says interactive revenue now makes up 6% of the publishing take at Tribune, but the company hopes to double that number within the next several years. Interactive revenue is up 28% so far this year.
Tribune shares were down 20 cents to $31.73 on Tuesday.